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VOLUME 28 / ISSUE 41 / October 8, 2014
TOP STORIES
Inside This Week’s Edition
TOP STORIES
JV Pays $2 Billion For Linn’s Granite
Wash, Cleveland Play Stakes..........................1
Natural Resource Partners Buys Williston
Well Interests For $340 Million.......................1
JV Pays $2 Billion For Linn’s Granite Wash, Cleveland Play Stakes
The joint venture (JV) between FourPoint
Energy LLC and EnerVest Ltd. has made its
FEATURES
Midstates Petroleum Cashes
In Louisiana Assets........................................4
Magnum Hunter’s Williston Sale
A Gain For Marcellus, Utica Growth.................5
largest move this year, acquiring from Linn
INSIGHT
Apache Maneuvers Anadarko Assets
Sale, Plots Big Shift Overseas.........................7
US A&D Thrives In Third
Quarter, Falters Globally.................................8
handle and western Oklahoma.
ON THE MARKET
U.S.
Properties In Permian, Anadarko
Basins On The Market..................................10
American Standard Markets
Bakken/Three Forks Leasehold.....................10
Canyon Creek Offers South
Texas Operated Production...........................11
ACE Companies Offers Acreage
In Oklahoma’s Woodford, Colorado...............11
ICA Energy To Sell Operated
Permian Basin Acreage................................11
ON THE MARKET QUICK LIST.................... 12
E&P A&D
U.S.
Bill Barrett Wraps Up $757
Million Worth Of Deals..................................14
CANADA
Chevron Will Sell Duvernay
Stake For $1.5 Billion...................................14
Encana Completes Sale Of
Bighorn Assets To Jupiter.............................16
Bellatrix Forms $250 Million
JV With Grafton’s CNOR...............................16
INTERNATIONAL
Murphy Snags $2 Billion In Sale
Of Malaysian Asset Percentage....................16
Energy LLC (NASDAQ: LINE) and LinnCo LLC
(NASDAQ: LNCO) their entire Granite Wash
and Cleveland plays located in the Texas PanThe JV said Oct. 3 that it signed a purchase and sale agreement to acquire Linn
Energy’s oil and gas properties and related
cover more than 145,000 net acres through-
midstream assets in the Western Anadarko
out western Oklahoma and the Texas Pan-
Basin for $1.95 billion.
handle and are 97% HBP.
LinnCo said it will use the proceeds to pay
The JV, formed earlier this year, already
its own acquisition bills. It also sold its Perm-
has spent $1.2 billion gross capital in the
ian holdings, the company said Oct 3.
Midcontinent.
The FourPoint-EnerVest JV picks up assets
For LinnCo, the company announced a
that include interest in 1,358 producing wells
$2.3 billion day of asset sales and added two
primarily in the Granite Wash, Tonkawa,
deals to its current load of seven concurrent
Cleveland and Marmaton formations. Daily
transactions, said Ethan Bellamy, senior ana-
net production is about 195 million cubic
lyst with Baird Energy.
Natural Resource Partners Buys Williston Well Interests For $340
Million
Natural Resource Partners LP (NYSE: NRP)
has acquired interests in nearly 200 Bakken/
Three Forks play wells from an affiliate of
Kaiser-Francis Oil Co. for $340 million.
The company said Oct. 6 it signed a de-
SERVICE & SUPPLY
WS Atkins Acquires Houston Offshore
Engineering For $73 Million..........................17
finitive agreement to acquire nonoperated
MIDSTREAM
EnLink Midstream Expands Along Gulf
Coast With Strategic Buy From Chevron........19
in the Williston Basin.
working interests in oil and gas properties
The assets, located in the Sanish Field in
A&D DEAL SHEET..................................... 20
Mountrail County, N.D., are all HBP and op-
INDUSTRY NEWS
Phillips Energy Partners Is Out To Buy,
Doesn’t Fret Over Commodity Prices.............21
erated by Whiting Petroleum Corp. (NYSE:
Comprehensive coverage of
oil and gas transactions at
com
Darren Barbee
Editor, A-D Center.com, A&D Watch
[email protected]
The company also said Oct. 3 that it’s sell(continued on page 3)
feet equivalent per day (MMcfe/d). The assets
action of $110,000 per flowing barrel. Along
with its recent $205 million acquisition of
WLL).
VantaCore Partners LP, NRP has raised its
Houston’s NRP said the acquisition from
2014 distributable cash flow to $230 million
Tulsa, Okla.’s Kaiser-Francis is expected to
from $205 million. The company said its
be immediately accretive to its distributable
revenues will also rise to $390 million from
cash flow and generate $58-$60 million of
$370 million.
EBITDA in 2015.
NRP will opportunistically seek to hedge
Baird Energy released a report saying
additional volumes beyond 2016 as the mar-
that the price of the assets suggests a trans-
(continued on page 4)
Copyright © 2014. Hart Energy
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JV Pays $2 Billion For Linn’s Granite Wash, Cleveland Play Stakes...(continued from page 1)
ing its Wolfberry positions in Ector and
Devon Assets Acquired By Linn
Midland counties, Texas, in the Permian
Basin for $350 million. Proceeds from the
Net acres
Production
(MMcfe/d)
Active well
count
Decline
rate
sales are expected to finance the com-
Rockies
396,000
147
1,990
12%
pany’s $2.3 billion acquisition of assets
Midcontinent
96,000
36
530
15%
E. Texas
121,000
45
630
14%
S. Texas
154,000
37
580
16%
N. Louisiana
129,000
10
150
14%
Total
896,000
275
3,880
14%
from Devon Energy Corp. (NYSE: DVN),
which closed in August.
LinnCo had planned to sell the Granite Wash and Cleveland assets to help
pay the Devon costs. In its deal with the
JV, it let go of about 145,000 net acres,
Source: Linn Energy
195 MMcfe/d of current production, 755
of FourPoint Energy, said its deal with
and disposal infrastructure, and an oil
Bcfe of year-end 2013 proved reserves
LinnCo materially boosts the scale of the
terminal facility in Wheeler County, Texas.
and related midstream facilities. Linn is
JV’s acreage position, which in early Sep-
Pro forma for the acquisition and
running a four-rig drilling program and
tember included 14 counties in Texas and
prior to customary post-closing adjust-
planned to spend $210 million toward
Oklahoma’s liquids-rich core area.
ments, the JV will boast an acreage posi-
the assets in 2014.
“The Linn assets will transform the
tion of more than 325,000 net acres in its
The Permian Basin properties in-
joint venture’s current operatorship pro-
established area of mutual interest with
clude about 7,200 net acres, 4.6 MBoe/d
file within producing wells, add a sig-
net production estimated to exceed 315
of current production and 19 MMBoe of
nificant inventory of operated upside
MMcfe/d. FourPoint and EnerVest expect
year-end 2013 proved reserves. Linn is
locations, provide access to higher value
strong growth while spending within
running a two-rig vertical drilling pro-
oil and gas markets and afford control of
free cash flow and continuing to exploit
gram and planned capex of about $95
capital allocation,” Solich said. “Addition-
the multi-year drilling inventory associ-
million on the assets in 2014.
ally, we have identified several cost syner-
ated with the combined asset base.
“Early in 2014, we outlined four keys
gies and strategic opportunities that will
to success at Linn: realize value for the
be pursued as we develop the asset base.”
Midland Basin position; continue to
The acquisition positions the JV with a
Jefferies LLC was financial adviser to
make accretive acquisitions; reduce capi-
large-scale footprint in a premiere multi-
FourPoint Energy and EnerVest in con-
tal intensity while increasing efficiency;
pay resource play, where the team has
nection with the transaction.
and improve credit metrics,” said Mark
substantial core competencies established
E. Ellis, chairman, president and CEO.
over a decade of operations in the basin.
The JV’s acquisition is expected to
close on or before Dec. 15.
RBC Richardson Barr, Scotia Waterous
and Wells Fargo were financial advisers
“We believe today’s announcement is a
FourPoint, based in Denver, noted that
positive development in achieving these
along with its upstream assets, it will ac-
objectives. As we enter into the second
quire a wholly owned midstream asset
RBC Richardson Barr was the sole fi-
half of the year, we remain committed to
consisting of more than 170 miles of gas
nancial adviser to Linn during the Perm-
these important goals.”
gathering and compression systems, liq-
ian Basin transaction.
George Solich, president and CEO
uid stabilization, associated water supply
3
to Linn during the Granite Wash and
Cleveland play transaction.
– Darren Barbee, Hart Energy
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Natural Resource Partners Buys Williston Well Interests For $340 Million…(continued from page 1)
ket provides favorable opportunities.
“Together with our existing interests
NRP Acquisition Highlights
in the Williston Basin, these assets give
Estimated average
production
About 3,100 boe/d
NRP extensive exposure to one of the
Well count
186 producing and 10 in development
premier oil plays in the United States,”
Net acres
5,700 (all HBP)
Average working interest
About 15%
Operator
Whiting Petroleum (100%)
said Wyatt Hogan, president of Natural
Resource Partners. “This acquisition represents another significant step in our efforts to diversify NRP, and we anticipate
that we will derive approximately 25% of
Source: Natural Resource Partners LP
gas credit facility to $150 million.
nancial adviser to NRP and Tudor, Pick-
NRP anticipates using borrowings
ering, Holt & Co. was exclusive financial
Hogan said the combination of NRP’s
under the credit facility, together with
adviser to Kaiser-Francis with respect to
oil and gas interests, soda ash business and
proceeds from equity and debt offerings,
the transaction.
recently acquired VantaCore aggregates
to fund the transaction. Upon closing,
NRP is a MLP that owns and manages
operations and our other non-coal assets
the partnership intends to hedge roughly
mineral reserve properties. NRP primar-
will contribute about 50% of its EBITDA in
80% of the acquired current production
ily owns coal, aggregate and oil and gas
2015 and positions NRP as a truly diversi-
through 2016 and a small percentage of
reserves across the U.S. that generate
fied natural resource company.
that production will be hedged for 2017
royalty income for the partnership.
our 2015 EBITDA from oil and gas.”
In connection with the acquisition
and 2018.
The partnership does not actively en-
agreement, NRP received a firm commit-
The transaction, which is subject to
gage in extracting natural resources, but
ment from Wells Fargo Bank National As-
customary closing conditions, will have
rather leases its properties to various
sociation to underwrite an expansion of
an effective date of Oct. 1 and is expected
operators in exchange for royalty pay-
the borrowing base in its existing oil and
to close in November.
ments.
Evercore Group LLC was exclusive fi-
FEATURE
Midstates Petroleum Cashes In Louisiana Assets
Midstates Petroleum Co. Inc. (NYSE:
core and brings liquidity which the com-
MPO) will sell the Dequincy portion of its
pany can use to pay down debt and fund
Louisiana Gulf Coast assets as the com-
its activities in the high-returning Missis-
pany builds liquidity heading into a cam-
sippian,” he said. “The stock is likely to
paign in the Midcontinent.
outperform.”
The purchase and sale agreement in-
The transaction does not include Mid-
cludes Midstates’ ownership interest in
states’ acreage and interests in the Fleet-
12,816 gross (12,676 net) developed and
wood area of Louisiana. The net proceeds
undeveloped acres in Beauregard and
from the sale will be used to pay down
Calcasieu parishes, La., the company said
based on increased throughput on the El
outstanding borrowings under the com-
Oct. 6.
Grande pipeline (capped at $2 million).
pany’s revolving credit facility.
A private buyer agreed to pay $90 mil-
During the third quarter of 2014, the
Peter Hill, interim president and CEO
lion for the assets, which includes the 20-
properties produced about 1,500 barrels
of Midstates, said the sale of the De-
mile El Grande pipeline constructed and
of oil equivalent per day (boe/d). Based
quincy assets completes the successful
wholly owned by Houston’s Midstates.
on those volumes, the transaction values
divestiture of its legacy Louisiana pro-
Midstates will receive $80 million in
Midstates assets at $60,000 per flowing
ducing assets.
cash, a 10% overriding royalty interest in
boe, said Neal Dingmann, analyst, Sun-
new wells drilled on the acreage (capped
at $8 million) and future payments
Trust Robinson Humphrey, in a report.
“This is a positive deal given it is non-
4
“This was a key component of our
strategy that is keenly focused on delivering financial stability, capital discipline,
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margin expansion and unlocking value,”
premier position in the Midcontinent,”
sippian Lime oil play in Oklahoma and
he said. “The sale of our Pine Prairie and
Hill said.
the Anadarko Basin in Texas and Okla-
Dequincy assets, coupled with our recent
Midstates recently increased its bor-
homa. The company’s operations also in-
borrowing base increase and our oppor-
rowing base by $50 million to $525 mil-
clude the upper Gulf Coast tertiary trend
tunistic hedging strategy, provides ample
lion, based on its Midcontinent assets,
in central Louisiana.
liquidity well into 2016 and allows us to
Dingmann said.
execute on our strategy to deliver positive cash flow in 2016.”
Midstates will look to improve its bal-
The company plans to have seven rigs
The transaction is expected to close
in the Mississippian Lime and two or
this November, subject to customary clos-
three in the Anadarko Basin in the third
ing conditions.
quarter of 2014.
ance sheet, high grade inventory and
Midstates’ drilling and completion ef-
deliver profitable growth through its
forts are currently focused in the Missis-
Magnum Hunter’s Williston Sale A Gain For Marcellus, Utica Growth
Magnum Hunter Resources Corp. (NYSE:
MHR) made another step in its year-long
strategy to grow production and reserves
in the Marcellus and Utica shales by unloading a few thousand noncore acres.
The company sold for about $23.1
million in cash noncore and nonoperated working interests in Williston Basin
assets to a privately held company affiliated with Formation Energy LP, it said
Sept. 30.
The assets include ownership interest in roughly 34,600 gross (2,852 net)
leasehold acres in Divide County, N.D.,
and were sold by its subsidiary, Bakken
Hunter LLC. The sold interest currently
accounts for about an average net production of just 170 barrels of oil equivalent per day (boe/d).
“The proceeds of these divestitures
have been used to reduce our overall indebtedness and to fund our growing operations in the Marcellus and Utica Shale
plays of West Virginia and Ohio,” said
Gary C. Evans, Magnum Hunter chairman and CEO, in a statement.
Magnum Hunter has 80,300 net acres
in the Marcellus and about 118,500 net
acres in the Utica. The company considers its holdings in the plays essential to
its success.
The company has 48 gross wells
drilled and placed on production to-date
in the Utica and Marcellus with eights
noncore assets to fund its core. It sold
gross (seven net) wells recently shut-
its South Texas properties to Australia’s
in on existing pads. In the Appalachian
New Standard Energy Ltd. and divested
Basin, it has 24.1 MMboe of total proved
Canadian properties in Alberta and Sas-
reserves as of June 30.
katchewan.
The company aims to exit 2014 with
The company’s recent sale in North
production of 32,500 boe/d. As of June 30,
Dakota is far from its last divestiture for
it had about 15,363 boe/d of production
the year, Evans said.
for the year.
“We anticipate the announcement of
The company sees great potential in the
additional divestitures of noncore as-
Utica, which could be the best shale play in
sets, which we are currently negotiating,
the U.S., it said in a September presenta-
throughout the remainder of the year,”
tion. It has identified significant explora-
he said.
tion potential in the wet/dry gas window
of the play in Ohio and West Virginia.
The company has about 91,200 net
acres in North Dakota’s Williston Basin,
So far this year, the company’s divesti-
without adjusting for the Divide County
tures of noncore assets, including the re-
sale. The acreage has total proved re-
cently announced sale, total about $125
serves of 15.5 MMboe, as of June 30.
million in gross proceeds.
– Emily Moser, Hart Energy
Earlier in 2014, Magnum Hunter sold
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INSIGHT
Apache Maneuvers Anadarko Assets Sale, Plots Big Shift Overseas
Already lining up efforts to sell or spin
off nearly $30 billion in overseas assets,
Apache Corp. (NYSE: APA) reportedly
plans to sell off a portion of its natural
gas assets in Texas and Oklahoma, according to published reports.
The company’s asking price is in the
neighborhood of about $2.5 billion.
Apache, based in Houston, is working with Wells Fargo to sell the assets,
Reuters said, citing unidentified sources.
About 100,000 net acres of oil and gas
producing assets in the Anadarko Basin
will be marketed, including Stiles Ranch,
Verden and Mocane Laverne properties
in Texas and Oklahoma.
Apache and Wells Fargo did not comment on the matter.
Apache management may be marching
to activist investor Jana Partners’ drumbeat, or at least giving the investment firm
plenty of tête-à-têtes. Jana reportedly has
at least $1 billion invested in Apache.
Jana suggested to the company in a
shareholder letter in July to rid itself of
its Kitimat and Wheatstone LNG projects
in Canada and Australia, though the company was already planning to sell 50%
working interest in Kitimat.
Before Jana came on the scene, the
company spent roughly the past two years
trimming assets that netted the company
about $10 billion, said Sameer Uplenchwar, managing director and senior E&P
analyst for Global Hunter Securities.
“The sale/spinoff of international assets looks accretive at first blush, as the
international portfolio has been a drag
on APA’s onshore business, an accretive monetization (Australia, North Sea,
Egypt, LNG) is going to be challenging,”
Uplenchwar said.
But he is not in the camp that believes
a spinoff will re-rate the stock higher
from current levels.
Just days ago Apache began to out-
The North Sea, ($5.5 billion) Australia
line plans for its international assets.
($4 billion) the Wheatstone ($4 billion) and
Apache’s management is working behind
Kitimat ($1billion) make up the remaining
the scenes to spin off its international
value, based on Driscoll’s evaluations.
business unit, which currently includes
“Apache’s domestic footprint is expand-
Australia, Egypt, LNG assets Wheatstone
ing and improving as the company con-
and Kitimat and the North Sea.
tinues to invest the bulk of its capital into
“The plan here is to list this interna-
what we think are high quality, liquids
tional company on the London Stock
focused assets. We estimate APA’s liquid
Exchange (LSE) with American deposi-
contribution to domestic production will
tory receipts (ADRs) trading on NYSE for
exceed two thirds of volumes in 2015E up
current APA investors who cannot own
from about 60% in 2013,” he said.
international stocks,” Mike Kelly, senior
The company’s strong Permian posi-
analyst, Global Hunter Securities, said in
tion could surprise with production re-
a Sept. 29 report.
sults. Apache posted 26% annual gains
“The company believes that over time
a pure play onshore North American and
for liquids production in the Permian in
the second quarter of 2014.
a standalone international company will
“It is worth noting that the combined
be an accretive split, though not right out
value of the international assets, includ-
of the gate,” he said.
ing Canada, under our upside scenario
In August, Thomas R. Driscoll, Barclays
is about $32 billion. Using our fair value
managing director and oil and gas equity
assumptions, the international assets are
analyst, examined Apache’s decision to
valued at $28 billion,” he said.
pull out of its LNG projects and the potential breakup of the company’s portfolio.
Uplenchwar was not impressed in
July, noting the company’s conventional
“We value the combined noncore assets,
international business is a cash flow
which include Egypt, Australia, the North
positive entity that funds the company’s
Sea and both LNG projects (Wheatstone
North American operations.
and Kitimat) at about $24 billion,” Driscoll
said. “Egypt is the largest contributor to enterprise value at about $9.5 billion.”
7
“A spinoff might result in net debt
moving higher,” he said.
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US A&D Thrives In Third Quarter, Falters Globally
The third-quarter 2014 was a quieter pe-
and 12 in the second quarter.
riod for global oil and gas M&A transacbut 2014 is still on track to have a greater
U.S. Permian Basin—High Demand in
Third-Quarter 2014
total M&A spend than 2013, according to
While global activity was apparently
the Evaluate Energy M&A database.
muted in the third quarter, the Perm-
tions compared to the previous quarter,
The total value of E&P deals world-
ian Basin has seen a hectic few months
wide in the quarter amounted to $34.5
in contrast. Acquisitions in the Permian
billion, a 30% drop on the total value of
made up nearly half of the total E&P deal
deals announced in the second quarter.
value in the U.S. and just under a third of
huge step for Encana to realize its goal
North American activity grew for the
total E&P deal value worldwide at about
to become a more oil-weighted company.
fifth consecutive quarter but, curiously,
$11.2 billion. M&A activity in the Perm-
Of all the companies listed on the To-
deals outside of North America almost
ian Basin has been on the rise since the
ronto Stock Exchange, Encana is the big-
dried up completely. North American
first quarter of 2014.
gest gas producer but only ranks as the
11th biggest oil producer. Encana’s board
deals made up nearly 86% of the total
Encana Speeds Up Move to Oil Production with Biggest Deal of the Quarter
has been seeking to rectify that in recent
could be attributable to various factors.
In late September, Encana Corp. (NYSE,
American unconventional resource
Unconventional oil resource plays are
TSE: ECA), Canada’s largest gas producer,
plays. The multi-billion dollar spinoff of
still the hottest properties on the market,
signed the biggest deal of the quarter in
PrairieSky Royalty Ltd., which closed in
with the Permian basin in high demand.
agreeing to acquire Texas-based Athlon
September, was part of this strategy and
In many cases, companies with a di-
Energy Inc. (NYSE: ATHL) for around
helped leave the Canadian company with
verse variety of assets trying to stream-
$5.93 billion in cash. After assuming debt
ownership positions in shale plays.
line their property holdings to give a
of $1.15 billion and picking up Athlon’s
Encana’s positions in the shale plays
more specific area of focus and as a re-
cash position of around $243 million is
gives them a large amount of current nat-
sult many North American assets have
taken into consideration, Encana’s total
ural gas production, but any oil is mainly
been made available for purchase. This
bill is $6.84 billion.
prospective, future production. The
deal value worldwide.
The rise in deals in North America
times, solely focusing efforts on its North
stands in stark contrast to a few years
The deal marks Encana’s entry into
140,000 Permian acres it acquired gives
ago where companies looked to hoard as
the Permian Basin, which seems to be the
Encana some immediate oil production.
much shale and unconventional acreage
most sought after resource play in North
Of the 30,000 barrels of oil equivalent per
as possible across every play they could
America right now. It is typically oil rich
day (boe/d) acquired, 80% is made up of
find. With the increasing gas prices and
from shale and other tight, unconven-
oil and the rest natural gas.
the approaching reality of North Ameri-
tional formations. The acquisition is a
The future potential of the asset and
can gas exports, gas assets are also bePermian Deals in 3Q14
coming more and more marketable.
Date
Announced
Acquirer
Target
Company
Oil/Gas
Total
Cost
($MM)
396,000
147
1,990
12%
9/29/14
Encana Corp.
Athlon
Energy Inc.
Oil
6,837
7/24/14
Breitburn Energy
Partners
QR
Energy LP
Oil
2,943.8
7/21/14
Diamondback
Energy Inc.
Unspecified
Oil
538
2014, just two deals announced outside
7/25/14
RSP Permian Inc
Unspecified
Oil
259
of North America exceeded $500 million.
8/25/14
Parsley
Energy Inc.
Cimarex
Energy Co.
Gas
242
As for deal value drying up outside of
North America, specific factors are hard
to pinpoint. The number of deals announced outside of North America has
been reasonably consistent over the last
few quarters, so this points to the lack of
“big” deals being the main contributor of
the low deal value. In the third quarter of
In the first quarter of 2014, eight deals
surpassed the half billion dollar mark
Source: Evaluate Energy M&A Database
8
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The new com-
the company was operating in the Bak-
bined acreage po-
ken and agreed to acquire Aurora Oil &
sition of 855,000
Gas, a South Texas Eagle Ford producer,
net acres is still
in February. Around the same time Bay-
not as large as Con-
tex began a portfolio review aimed at
tinental Resources
identifying and selling producing assets
( N YS E :
with lower rates of return.
CLR),
which holds more
The Bakken assets that were held at
than 1.2 million
the turn of the year are the first major as-
acres in the play.
sets to be sold; Baytex announced a deal
However the addi-
with SM Energy Co. (NYSE: SM) in July to
tional production
sell its Bakken properties for $330.5 mil-
combines
with
lion. Within nine months, the company’s
Whiting’s own re-
U.S. business moved south with a focused
ported first quar-
on Texas and the Eagle Ford Shale, where
ter
wells cost around $1.7 million less to drill
production
to give 107,000
on average.
boe/d from the
erations, which is
Murphy Oil sells Stake in Malaysian
Assets on Last Day of Quarter
higher than Con-
The biggest deal outside of North Amer-
tinental’s 97,500
ica this quarter was announced on Sept.
boe/d in the same
30, as Indonesia’s Pertamina agreed to ac-
period. The deal is
quire 30% of Murphy Oil’s (NYSE: MUR)
expected to close
Malaysian offshore assets for $2 billion.
by the end of the
Offshore assets can be costly to maintain,
year.
and the reduced ownership for Murphy
first quarter’s op-
The Bakken has
will free up significant funds every year
Encana’s plans to quickly expand the oil
seen similar deals
for the company to reassign towards its
portion of its portfolio will explain the
in recent years, with companies agreeing
core Eagle Ford position back in the U.S.
relatively high prices paid per boe/d of
to deals that consolidate already signifi-
or towards other acquisition opportuni-
production ($223,000) and per boe of 1P
cant acreage positions in the play, sug-
ties. For Pertamina, this may only be the
reserves ($38.69).
gesting that the Bakken is an area where
start of things to come as the company
only those with the largest scale opera-
continues to struggle with demand back
Whiting to Become the Largest Bakken
Producer as Baytex Moves South
tions can succeed. Of course, the flip-
home in Indonesia. More deals like this
side to this is that smaller operators find
should be expected from Pertamina as
Whiting Petroleum Co. (NYSE: WLL) an-
things difficult and Baytex Energy (NYSE:
demand for oil and gas is growing while
nounced the second biggest deal of the
BTE) has followed in the footsteps of Mag-
production is falling. Consequently,
third quarter with the $6 billion acqui-
num Hunter Resources (NYSE: MHR) and
sourcing cheaper imports are becoming
sition of Kodiak Oil & Gas (NYSE: KOG).
QEP Resources (NYSE: QEP) this quarter
a much higher priority than ever before
The acquisition adds about 34,000 boe/d
in selling off Bakken acreage.
and acquiring overseas stakes will assist
to Whiting’s Bakken portfolio, according
to first quarter figures from Kodiak.
Baytex Energy’s U.S. business has
changed radically within the first nine
months of 2014. At the turn of the year,
9
in this endeavor.
– Mark Young of Evaluate Energy & CanOils,
Special To Hart Energy
www.a-dcenter.com
ON THE MARKET
U.S.
Properties In Permian, Anadarko Basins On The Market
Oil and gas companies are offering for
age net income of roughly $105,138 per
tal wells. The wells are comprised of four
sale assets in Texas and Oklahoma plays,
month with a six-month average 8/8ths
horizontal producing Cleveland wells and
according to EnergyNet, which has been
production of about 11,686 thousand
two horizontal nonproducing wells.
retained to assist with the sales.
cubic feet per day (Mcf/d) and 18 barrels
In the first package, a subsidiary of
The wells have a three-month average
net income of nearly $170,792 per month
per day (bbl/d) of oil.
EnerVest Ltd. is selling nonoperated
Operators include Anadarko E&P On-
working interest in more than 290 wells
shore LLC, Chevron U.S.A. Inc., Legacy Re-
in Texas’ Permian Basin. The wells have a
serves Operating LP, Nadel and Gussman
Production:
six-month average net income of roughly
Permian LLC, Pioneer Natural Resources
• Cy Jake 2-31H—99 Mcf/d and 46
$105,138 per month.
USA Inc. and WTG Exploration Inc.
with a current 8/8ths production of about
560 Mcf/d/ and 110 bbl/d of oil.
bbl/d of oil (six-month average);
The other package, for sale by Primary
The auction opens for bidding at 1:45
Natural Resources III, is comprised of
p.m. CDT on Oct. 8. Bidding closes at 1:45
operations and undeveloped leasehold
p.m. CDT on Oct. 15. For information
• Haggard 1-12—204 Mcf/d and 22
acreage within the Anadarko Basin in
contact Chris Atherton, EnergyNet vice
bbl/d of oil (four-month average); and
Oklahoma. Of the 5,537 net leasehold
president business development, at chris.
• Archer 3-5H—257 Mcf/d and 29
acres for sale, 1,333 net acres are HBP.
[email protected] or 832-654-6612.
bbl/d of oil (three-month average).
EnerVest—Permian Basin
leasehold acres with 1,333 net acres HBP.
EnerVest Energy Institutional Fund XII-A
Primary Natural Resources—Anadarko
Basin
LP is divesting a nonoperated working
Primary Natural Resources III LLC is
the net leasehold acres—are located in
interest package in the Permian Basin lo-
selling its operations and undeveloped
Custer County, Okla.
cated in Crockett County, Texas.
leasehold acreage in the Anadarko Basin
The auction opens for bidding at 2
located in Custer, Dewey, Roger Mills and
p.m. CDT on Oct. 15. Bidding closes at 2
Washita counties, Okla.
p.m. CDT on Oct. 22. For information con-
• Nellie 1-36H—13 bbl/d of oil (sixmonth average);
The package also includes 5,537 net
The package includes a 3.1258.948351% gross working interest and
2.604156- 7.695431% net revenue inter-
The package includes operations with
a 93.27-100% working interest and 75.56-
est in more than 290 wells.
The wells have a six-month aver-
The majority of the acreage—97.7% of
tact EnergyNet’s Atherton at [email protected] or 832-654-6612.
81.25% net revenue interest in six horizon-
American Standard Markets Bakken/Three Forks Leasehold
American Standard Energy Corp. (OTC:
est) across 40,765 gross (6,202 net) acres.
leum Inc. (NYSE: OAS), Marathon Oil Corp.
ASEN) is selling certain producing non-
The properties span seven counties in
(NYSE: MRO) and Statoil ASA (NYSE: STO).
operated working interest properties and
North Dakota including Mountrail, Wil-
undeveloped leasehold targeting the Bak-
liams, Burke and Divide counties.
ken/Three Forks formations.
The undeveloped leasehold position
consists of 42,322 gross (18,731 net) acres
The first month of projected net pro-
across 11 counties in North Dakota and
The company will entertain separate
duction is 220 barrels of oil equivalent
Montana, which include Mountrail, Wil-
and combined offers for the nonoper-
per day. Net cash flow for the same month
liams, McKenzie, Burke, and Divide coun-
ated producing properties and the unde-
is about $380,000. American Standard’s
ties, N.D. One to three years remain on
veloped leasehold. E-Spectrum Advisors,
deep upside inventory includes 198 quan-
the primary term for most of the leases.
an affiliate of Energy Spectrum Advisors
tified upside locations (76% proved) and
The online data room is open. Bids
Inc., has been retained to handle the sale.
hundreds of unquantified infill locations.
are due Oct. 28. For information contact
The nonoperated producing proper-
On average more than 40 wells are
Patrick George, E-Spectrum associate, at
ties include ownership in roughly 180
drilled across the company’s position each
[email protected] or
horizontal producing wells with a 6.5%
year. Primary operators include Continen-
214-987-6129.
working interest (4.9% net revenue inter-
tal Resources Inc. (NYSE: CLR), Oasis Petro-
10
www.a-dcenter.com
Canyon Creek Offers South Texas Operated Production
Canyon Creek Resources LLC is selling
of $132,700 per month
operated production in South Texas with
»» Gross sales of 951 thousand cubic
numerous recompletion and develop-
feet per day (Mcf/d) and 42 bar-
ment opportunities.
Upper Frio, Lower Frio, 7,000 feet
and 8,000 feet Sands along with several drilling opportunities;
rels per day (bbl/d) of oil (8/8ths).
The package consists of more than
97% working interest operatorship in Bee,
Brooks, Duval, Kenedy, Live Oak and Nueces
counties, Texas. Meagher Energy Advisors
has been retained to handle the sale.
Current operations:
• Duval County, Cuatro De Julio Field,
Land:
behind-pipe opportunities include:
• All leases are HBP, about 7,792 net
4,500 feet, 4,450 feet, 4,200 feet 3,650
acres; and
feet, 2,950 feet, 2,900 feet, 2,350 feet
• Various depth limitations and restric-
and 1,899 feet Sands. Drilling op-
tions on portions of the leasehold.
portunities identified in the Queen
• Upside—Recompletion and Drilling
• Entire package comprised of operated wells (39 gas, 21 oil, seven dis-
City Formation; and
Opportunities:
• Live Oak County, Dinero West and
• Nueces County, Baldwin Field,
Jackson fields, behind-pipe pay iden-
multiple behind-pipe opportuni-
tified at 3409-14 feet and 3395-99
• Primarily Legarto, Queen City,
ties identified in the Catahoula,
feet. Drilling opportunities identified
Vicksburg, Miocene, Pettus, Frio,
Oakville, 4,375 feet, 3,300 feet, 2,900
in the Hockley and Pettus Sands.
Hockley and Yegua production;
posal);
feet, 2,700 feet, 2,400 feet, 2,200 feet
Bids are due Oct. 17. The sale will
• Average interest of 97.7% gross
and 2,100 feet Sands. Drilling loca-
close Nov. 30 with a Sept. 1 effective date.
working interest and 77.5% net rev-
tions identified in the 4,400 feet,
For information contact Jacque Semple,
enue interest; and
7,900 feet and 9,800 feet Sands;
Meagher project manager, at jsemple@
• • Cash flow and production from
• rooks County, Scott & Hopper/Alta
June 2013 to May 2014 of
Mesa Field, multiple behind-pipe
»» Average net operating cash flow
opportunities identified in the
meagheradvisors.com or 918-481-5900
ext. 221.
ACE Companies Offers Acreage In Oklahoma’s Woodford, Colorado
ACE Cos. is selling 660 gross undeveloped
age position;
• All rights, all depths.
acres in Colorado and Oklahoma’s Wood-
• Located in Pittsburg County, Okla.;
ford Shale.
• About 76% net revenue interest;
tober. Bids are due by Oct. 23. The sale
• Woodford Shale Formation; and
will have a Nov. 1 effective date.
The package is broken up into two
Evaluation data is available early Oc-
lots, which will each be sold absolute to
• All rights, all depths.
the highest bid. The Oil & Gas Asset Clear-
Lot 2:
ter, Clearinghouse executive assistant, at
inghouse has been retained to handle the
• 20 gross (2.6 net) contiguous acre-
[email protected] or 832-
transaction.
For information contact Lynn McMas-
age position;
601-7636.
Lot 1:
• Located in La Plata County, Colo.;
• 640 gross (480 net) contiguous acre-
• About 76% net revenue interest; and
ICA Energy To Sell Operated Permian Basin Acreage
ICA Energy Inc. is selling operated oil and
• 720 acres;
gas properties with leasehold acreage in
• Two active producers (Wolfcamp);
the Permian Basin.
• 94.05-100% working interest, 67.72-
The assets are located in Glasscock
County, Texas. Simplex Energy Solutions
has been retained to handle the sale.
Highlights:
»» offset acreage (400 acres) avail-
85.5% net revenue interest; and
• Upside of
Offers are due on Oct. 23. For information contact Roy Jackson, Simplex manag-
»» horizontal/vertical drilling locations
able
»» Spraberry behind-pipe.
ing member, at rjackson@simplexenergy.
com or 432-683-3791.
11
www.a-dcenter.com
ON THE MARKET QUICK LIST
Location
Basin/Play
Seller
Agent
Bid Due Date
Alvand
Blue Water Energy Partners LP
Legacy Income Fund I Ltd.
Petroleum Partners; H&B Energy Partners II
LLC; Gold City Partners XI LP
Rock Springs Oil Co.
Texian Oil-I LP
Bank of America NA; Anna M. Porter
Wainwright
Birchwood Resources inc.
Breck Operating Corp.
Joan M. Watford Trust
NEZ Resources Inc.
Okie Crude Co.
P.O.&G. Resources LP
PFIIA LLC
Apache Corp.
Callon Petroleum Co.
EnerVest Ltd.; EnerVest Energy Institutional
Fund XII-A LP
Geronimo Holding Corp.
SV Resource Partners LLC
Aspect Energy LLC
Black Swan Energy Ltd.
Robert Burns
Undisclosed
Canyon Creek Resources LLC
Howard Exploration Inc.
Michael W. Brown; Emily G. Brown
Timothy Stepnowsky
Fairmount Energy LLC
Kuhn Oil Co. Inc.
Primary Natural Resources III
ACE Companies
ICA Energy Inc.
Juno Energy II LLC
Richard C. Mosty
Sheffield Energy Ltd.
State of Utah
American Standard Energy Corp.
Charger Resources LLC
Shields Cos.
Bright & Co. LLC
Five States Energy Co. LLC
Genesis Gas & Oil LLC
J.R. Jones Charitable Trust
Redbird Royalties
Stryker Energy LLC
Terrace Cutlass LLC
Undisclosed
PLS Inc.
EnergyNet
EnergyNet
10/8/14
10/8/14
10/8/14
EnergyNet
10/8/14
EnergyNet
EnergyNet
10/8/14
10/8/14
EnergyNet
10/9/14
Sayer Energy Advisors
The Oil & Gas Asset Clearinghouse LLC
EnergyNet
EnergyNet
EnergyNet
Simplex Energy Solutions
EnergyNet
Bank of Novia Scotia
EnergyNet
10/9/14
10/9/14
10/9/14
10/9/14
10/9/14
10/9/14
10/14/14
10/15/14
10/15/14
EnergyNet
10/15/14
EnergyNet
Lantana Energy Advisors
EnergyNet
Simon Energy Associates LLC
Meagher Energy Advisors
EnergyNet
EnergyNet
EnergyNet
EnergyNet
EnergyNet
EnergyNet
Simplex Energy Solutions
BMO Capital Markets
EnergyNet
EnergyNet
E-Spectrum Advisors LLC
BMO Capital Markets
Meagher Energy Advisors
PLS Inc.
PLS Inc.
PLS Inc.
PLS Inc.
PLS Inc.
PLS Inc.
10/15/14
10/15/14
10/16/14
10/16/14
10/16/14
10/16/14
10/17/14
10/21/14
10/21/14
10/21/14
10/22/14
10/22/14
10/22/14
10/23/14
10/23/14
10/23/14
10/23/14
10/23/14
10/23/14
10/28/14
10/31/14
11/3/14
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
North America
AL; ND; NM; OK; TX Multiple
Texas
Anadarko/Granite Wash
Texas
Austin Chalk
Montana
Sheridan County
Texas
New Mexico
Navarro County
Permian Basin
New Mexico
San Juan Basin
Canada
Texas
OK; TX
Texas
Oklahoma
Texas
Louisiana
Canada
Texas
Alberta & Saskatchewan
Austin Chalk, Buda & Navarro
Several Counties
Cotton Valley/Haynesville
Kingfisher County
Permian Basin
Several Parishes
Alberta
Permian Basin
Texas
Permian Basin
North Dakota
Texas
Alabama
Canada
Texas
Texas
Texas
Texas
Texas
Pennsylvania
Texas
North Dakota
Oklahoma
CO; OK
Texas
Texas
Texas
Canada
Utah
MT; ND
Wyoming
AR; OK
Texas
North Dakota
Colorado
New Mexico
LA; OK; TX
NY; OH; PA
Texas
Texas
Bakken Shale
Austin, Jackson & McMullen Counties
Escambia County
Alberta
Martin County
Cochran County
Several Counties
Brazoria County
Permian Basin
Utica Shale
Eagle Ford Shale
Williston Basin
Anadarko Basin
Multiple/Woodford
Permian Basin
Permian Basin
DeWitt County
Alberta
Several Counties
Bakken/Three Forks
Powder River Basin
Mississippian/Hunton
Midland Basin
Bakken Shale
Piceance Basin
San Juan Basin
Multiple
Appalachian Basin
Eagle Ford Shale
Permian Basin
For additional On The Market properties, including international offerings, please see A-Dcenter.com website.
12
www.a-dcenter.com
13
www.a-dcenter.com
E&P A&D
U.S.
Bill Barrett Wraps Up $757 Million Worth Of Deals
Bill Barrett Corp. (NYSE: BBG) announced
acreage exchange adding 7,856 net acres
from the acquisition and the recently ac-
Sept. 30 it closed the series of transac-
to its position in the northeast Wattenberg.
quired assets in North Louisiana and East
tions valued at $757 million that will
Cash proceeds of $568 million were ap-
Texas. As of Sept. 30, Vanguard has more
increase its acreage position in the Wat-
plied to repay Bill Barrett’s outstanding
than $620 million in liquidity to continue
tenberg by 20%.
balance on its revolving credit facility and
its growth through acquisitions strategy.
The multi-layered deal included the
for corporate purposes, including capital
The effective date for the sale/exchange
sale of the Denver-based company’s re-
expenditures. Its borrowing base was re-
of the majority of the Powder River Basin
maining position in the Gibson Gulch nat-
duced to $375 million.
assets is April 1 and the effective date for
ural gas program in the Piceance Basin to
Houston’s Vanguard funded the
Vanguard Natural Resources LLC (NYSE:
Piceance Basin acquisition with borrow-
Citigroup Global Markets Inc. was fi-
VNR) for $508.7 million.
ings under its existing reserve-based
nancial adviser to Bill Barrett on the Gib-
the Piceance Basin sale is July 1.
It also closed the sale of the majority of
credit facility. Its borrowing base was in-
son Gulch sale and BMO Capital Markets
its Powder River Basin acreage to several
creased to $2 billion from $1.525 billion in
was financial adviser on the Powder River
undisclosed buyers, which included an
redetermination to include the properties
Basin transactions.
CANADA
Chevron Will Sell Duvernay Stake For $1.5 Billion
Chevron Corp. (NYSE: CVX) agreed to sell
chairman and managing director Sami al-
a 30% stake in a venture to develop oil
Rushaid said during a conference last year
and natural gas from Canada’s Duvernay
without disclosing any details.
Shale to Kuwait Petroleum Corp., giving
Chevron’s deal with Kuwait appears to “be
the Middle East producer a foothold in a
at a good price,” said Peter Hutton, a London-
top North American play.
based analyst for RBC Capital Markets, who
rates Chevron a Hold and owns none. The
Chevron, the second-largest U.S. oil and
gas producer, said the $1.5 billion purchase
price includes cash and an agreement to
contribute to the venture’s capital costs.
Chevron has drilled 16 exploration wells in
the area so far, the San Ramon, Calif.-based
company said in a statement Oct. 6.
The Duvernay area in Alberta is
among the most promising shale opportunities in North America. So far, wells
in the region have proven more expensive and taken longer to drill than similar
shale formations in the U.S., Tudor Pickering Holt & Co. said in a research note.
There’s “still a lot of wood to chop” in the
Duvernay, with per-well costs potentially
coming down by $1.5 million, the Houstonbased investment bank said in a separate
note Oct. 2. More sophisticated drilling by
larger companies “may allow year-round
drilling and drive material cost saving.”
Chevron’s move comes as other Duver-
nay Shale holders such as Athabasca Oil
Corp. (TSE: ATH), Penn West Petroleum
Ltd. (NYSE: PWE; TSE: PWT), Trilogy Energy Corp. (TSE: TET) and Talisman Energy Inc. (NYSE: TLM; TSE: TLM) explore
partnerships. Talisman, whose secondlargest shareholder is billionaire Carl
Icahn, sees a joint venture in Duvernay
as an opportunity to boost shares.
The Duvernay, in central Alberta,
holds an estimated 443 trillion cubic feet
of gas and 61.7 billion barrels of oil, according to a report last year by the Energy Resources Conservation Board.
Kuwait has relied on traditional drilling
while hydraulic fracturing and horizontal
drilling have helped the U.S. unlock oil and
gas reserves in shale plays. The Kuwait Oil
Co. has identified a shale gas deposit and
was planning to develop the resource soon,
14
sale will reduce Chevron’s cash burn as it invests heavily in new developments through
2017, Hutton said Oct. 6 in a note to clients.
RBC assumes Chevron will sell $4 billion of assets this year, reducing cash
burn to $7.2 billion.
Chevron will keep a 70% share in the
venture and remain the operator. It built its
Duvernay holdings last year with the purchase of 67,900 acres from Alta Energy Luxembourg S.a.r.l. for an undisclosed price.
“We remain encouraged by the early
results of our exploration program,” Jeff
Shellebarger, president of Chevron’s North
American unit, said in the statement.
The deal is between Chevron and
Kuwait Foreign Petroleum Exploration,
a unit of state-run Kuwait Petroleum,
which manages investments outside the
Middle Eastern country.
– Bloomberg
www.a-dcenter.com
15
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Encana Completes Sale Of Bighorn Assets To Jupiter
Encana Corp. (NYSE, TSE: ECA) an-
Calgary, working interests in pipelines, fa-
agement LLC (NYSE: APO). The private E&P
nounced Sept. 30 it completed the sale of
cilities and service arrangements related to
focuses on liquids-rich natural gas proper-
its Bighorn assets in Alberta to Calgary’s
the Bighorn properties.
ties in Western Canada.
Jupiter Resources Inc. for $1.8 billion
(C$2 billion).
The sale includes roughly 360,000 net
At the end of 2013, the assets had total
RBC Capital Markets was financial ad-
net proved reserves of 1.1 billion cubic feet
viser to Encana for the transaction. The
equivalent, 75% of which is natural gas.
company’s legal adviser was Burnet, Duck-
acres of land in the Alberta Deep Basin
Jupiter is a portfolio investment of funds
along with all of Encana’s, also based in
managed by affiliates of Apollo Global Man-
worth & Palmer LLP. The sale had an effective date of May 1.
Bellatrix Forms $250 Million JV With Grafton’s CNOR
Bellatrix Exploration Ltd. (NYSE, TSE:
ture is based upon the success of the first JV
est will automatically convert to a 10.67%
BXE) announced Sept. 30 it entered into
with a Grafton affiliate.
gross overriding royalty on Bellatrix’s pre-
a new multi-year joint venture (JV) ar-
Between both ventures of the Calgary-
joint venture working interest after payout
rangement with Canadian Non-Operated
based companies, a total of about $446.9
(being recovery of CNOR’s capital invest-
Resources Corp. (CNOR), which is man-
million (C$500 million) has been commit-
ment plus an 8% return on investment).
aged by Grafton Asset Management Inc.
ted to the development of Bellatrix’s lands.
The development plans will be proposed
CNOR has committed roughly $223.5
As part of the second JV agreement,
by Bellatrix and approved by a manage-
million (C$250 million) in capital towards
CNOR will pay 50% of the drilling, comple-
ment committee comprised of representa-
future accelerated development of a por-
tion, equipping and tie-in capital expendi-
tives from both companies.
tion of Bellatrix’s extensive undeveloped
tures associated with development plans
The JV funding is available immediately.
land holdings in Western Canada’s Sedi-
in order to earn 33% of Bellatrix’s working
However, Bellatrix expects the funds to be
mentary Basin focused in Alberta. The ven-
interest before payout. The working inter-
spent primarily from 2016 through 2018.
INTERNATIONAL
Murphy Snags $2 Billion In Sale Of Malaysian Asset Percentage
Murphy Oil Corp. (NYSE: MUR) agreed to
sell 30% of its Malaysian oil and gas assets for $2 billion in an all cash transaction, the company said Sept. 30.
The net sales price is likely to be
slightly lower.
“From prior discussions and comments from management about existing tax credits, we estimate that Murphy
can shield the majority of these proceeds
from significant U.S. tax liabilities,” said
Roger D. Read, senior analyst, Wells Fargo
Securities, in a report.
Read said the sale should have a positive effect on the share price for the El
Mexico seen as most likely,” he said.
Dorado, Ark.-based company.
Malaysian business.
“Next up on the agenda will be rede-
Roger W. Jenkins, president and CEO,
“We are excited to strengthen our
ploying this capital towards the U.S.—
said the transaction marks the value of
partnership with Pertamina and look
with Eagle Ford Shale and/or Gulf of
the high-margin, long-term assets in its
forward to working with them and our
16
www.a-dcenter.com
duction and share repurchases.”
Murphy Oil Resources as of July
Tudor, Pickering, Holt & Co. was exclu-
Reserve &
Resource
(MMboe)
Value ($/
boe)
Value
($MM)
Total
Cost
Eagle Ford
690
$8.7
$6,031
12%
Oil Sands
460
$4.1
$1,904
6,837
Montney
309
$3.0
$928
2,943.8
Oil Co. Ltd. and Murphy Sarawak Oil Co.
Dalmatian
25
$12.2
$298
538
Ltd., entered into the agreement with PT
Siakap North-Petai
16
$9.7
$156
259
Pertamina Malaysia Eksplorasi Produksi.
Sarawak Gas
110
$15.1
$1,667
242
The effective date of the transaction
sive financial adviser to Murphy on the
transaction. Gibson, Dunn & Crutcher
LLP was the company’s legal counsel.
Murphy’s subsidiaries, Murphy Sabah
will be Jan. 1, 2014 with closing expected
Other Proved &
Nonproved Resource
2,290
$2.4
$5,509
Total Resource
3,900
$4.2
$16,493
Less Proved Reserve
688
$15.1
$10,372
Nonproved Resource
3,212
$1.9
$6,120
to take place in two phases. The first
phase is expected to be completed in the
fourth quarter of 2014 and the second
phase is expected to be completed by the
first quarter of 2015.
Source: Barclays
The transaction is subject to, among
other partners in Malaysia,” Jenkins said.
an individual or combination of strate-
other things, the approval of Petroliam
“We will continue to evaluate all aspects
gic and financial initiatives such as in-
Nasional Berhad (PETRONAS).
of our portfolio. This transaction allows
creased drilling capital in the Eagle Ford
us to re-deploy the proceeds through
Shale, acquisition opportunities, debt re-
SERVICE & SUPPLY
WS Atkins Acquires Houston Offshore Engineering For $73 Million
acquired Houston Off-
strengthens Atkins’ position in the ac-
a high demand for advanced, multidis-
shore Engineering LLC (HOE) for $73 mil-
WS Atkins Plc tive oil and gas design and engineering
ciplinary engineering skills. HOE brings
lion (about 45 million pounds), a press
market and is in line with our strategy
exceptional expertise and an outstanding
release said Oct. 1.
to invest in growing our energy business,
reputation to our existing business in this
HOE, which designs offshore deepwa-
our key sector focus area,” said Dr. Uwe
market. We now have around 1,000 oil
ter floating production platforms, had
Krueger, WS Atkins’ CEO. He holds a doc-
and gas specialists drawing on technical
$41 million (about 25 million pounds) in
torate from the University of Frankfurt.
excellence from our regional operations
revenue on Dec. 31, 2013, the press release added.
“This
acquisition
“As the oil and gas industry continues to look for ways to access more chal-
considerably
lenging deepwater oil reserves there is
17
worldwide,” he added.
WS Atkins Plc is a multinational company based in London.
www.a-dcenter.com
18
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MIDSTREAM
EnLink Midstream Expands Along Gulf Coast With Strategic Buy From Chevron
EnLink Midstream announced Sept. 29
it will buy Chevron Corp.’s (NYSE: CVX)
Gulf Coast natural gas pipeline systems,
boosting its Louisiana market presence
for $235 million.
In March, Devon Energy Corp. (NYSE:
DVN) combined its U.S. midstream assets
with Crosstex Energy LP to create EnLink
Midstream Partners LP (NYSE: ENLK) and
EnLink Midstream LLC (NYSE: ENLC).
EnLink said the assets, which includes
the Bridgeline, Sabine and Chandeleur
systems, are primarily located in southern Louisiana.
The assets include 1,400 miles of gas
pipelines spanning from Beaumont,
Texas, to the Mississippi River corridor
and about 11 billion cubic feet (Bcf) of
working natural gas storage capacity.
expanded range of services.”
net fractionation capacity. The company
Dallas’ EnLink will also gain owner-
The deal will strengthen Louisiana’s
also has barge and rail terminals, prod-
ship and management of the title track-
position in the developing industrial, re-
uct storage facilities, brine disposal wells
ing services offered at the Henry Hub,
fining and petrochemical market. It also
and other assets.
the delivery location for New York Mer-
marries the system to EnLink’s combined
cantile Exchange natural gas futures
assets there.
entities: the MLP, EnLink Midstream
contracts. Henry Hub is connected to 13
EnLink holds assets in the Barnett,
major interstate and intrastate natural
Permian Basin, Cana-Woodford, Arkoma-
gas pipeline and storage systems.
Woodford, Eagle Ford, Haynesville, Gulf
Combined with its existing Louisiana
EnLink consists of two publicly traded
Coast, Utica and Marcellus regions.
Partners LP; and the publicly traded general partner, EnLink Midstream LLC.
The transaction, which is expected
to be completed in the fourth quarter of
holdings, the assets will provide EnLink
The company own nearly 7,400 miles
2014, is subject to the satisfaction of cus-
with tremendous optionality to provide
of gathering and transportation pipe-
tomary closing conditions contained in
services to southern Louisiana’s growing
lines, 13 processing plants with 3.4 Bcf/d
the agreement.
industrial, refining and petrochemical
of net processing capacity, seven frac-
marketplace.
tionators with 252,000 barrels per day of
“The assets will support our growth
strategy by expanding our franchise position in southern Louisiana, a dynamic
and growing market we know well,” said
Barry E. Davis, EnLink president and
CEO, in a statement. “These high-quality
assets will complement our existing business and provide us with opportunities to
serve a wider range of customers with an
– Emily Moser, Hart Energy
EnLink Acquired Assets
Bridgeline
System
About 985 miles of natural gas pipelines in southern Louisiana with
a total system capacity of roughly 920,000 MMcf/d.
Sabine
System
About 150 miles of natural gas pipelines in Texas and southern
Louisiana with a total capacity of roughly 235,000 MMcf/d.
Chandeleur
System
About 215 miles of offshore Mississippi and Alabama pipelines with
a total capacity of about 330,000 MMcf/d.
Storage
Assets
Three caverns located in southern Louisiana with a combined
working capacity of roughly 11 Bcf, including two near Sorrento,
La., with a capacity of about 4 Bcf and one inactive cavern near Napoleonville, La., with about 7 Bcf of capacity.
Source: EnLink Midstream
19
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A&D DEAL SHEET
Sector
Date
Buyer
Announced
Seller
Value ($MM)
Location of
assets
Comments
E&P
9/25/14
Ultra Petroleum Corp.
Royal Dutch Shell Plc;
SWEPI LP
925
PA; WY
Bought interest in the Pinedale Field in WY in exchange for
155,000 net acres in the Marcellus located in Tioga and
Potter counties, PA.
E&P
9/29/14
Encana Corp.
Athlon Energy Inc.
7100
TX
To acquire the Fort Worth, TX-based company focused
on the Permian Basin; includes 140,000 net acres in the
Midland Basin. (Expected to close by year-end 2014)
Mid
9/29/14
EnLink Midstream
Partners LP; EnLink
Midstream LLC
Chevron Corp.; Chevron
Pipe Line Co.; Chevron
Midstream Pipelines LLC
235
LA; TX
To buy Gulf Coast natural gas pipeline assets.
(Expected to close 4Q14)
E&P
9/30/14
Canadian Non-Operated
Resources Corp.; Grafton Bellatrix Exploration Inc.
Asset Management Inc.
223.5
Canada
To form multi-year JV to develop undeveloped land
holdings in the Western Canada's Sedimentary Basin
focused in Alberta.
E&P
9/30/14
Jupiter Resources
Inc.; Apollo Global
Management LLC
Encana Corp.
1800
Canada
Acquired Big Horn assets covering 360,000 net acres in
Alberta Deep Basin; Includes total net proved reserves of 1.1
Bcfe at year end 2013 (75% gas).
E&P
9/30/14
PT Pertamina Malaysia
Eksplorasi Produksi
Murphy Oil Corp.
2000
Malaysia
To buy 30% stake in Malaysian oil and gas assets.
E&P
9/30/14
Undisclosed
Bill Barrett Corp.
232
CO; WY
Bought 46,510 net acres in the Powder River Basin
with net production that average 1,479 boe/d in 2Q14
in exchange for 7,856 net acres in the Wattenberg area.
E&P
9/30/14
Undisclosed; Formation
Energy LP
Magnum Hunter
Resources Corp.; Bakken 23.1
Hunter LLC
ND
Acquired noncore and nonoperated WI in the Bakken/
Three Forks play within the Williston Basin located in
Divide County.
E&P
9/30/14
Undisclosed
PetroQuest Energy Inc.
9.7
TX
Purchased Eagle Ford assets with 2.1 Bcfe of proved
as of June 30.
E&P
9/30/14
Vanguard Natural
Resources LLC
Bill Barrett Corp.
525.0
CO
Purchased 12,000 net acres in the Gibson Gulch natural
gas program in the Piceance Basin.
E&P
10/1/14
Crescent Point Energy
Ltd.
Lightstream Resources
Ltd.
338
Canada
Purchased SE Saskatchewan conventional business
unit; includes 3,300 boe/d (95% light oil) of
production.
S&S
10/1/14
Dover Corp.
Accelerated Cos. LLC
430
USA
Acquired The Woodlands, TX-based company, which focuses
on ESP and jet pump technologies.
Mid
10/1/14
Enterprise Product
Partners LP
Oiltanking Partners
LP; Oiltanking Holding
Americas Inc.
6
TX
To merge Houston-based Oiltanking Partners with
company; acquired controlling interest.
E&P
10/1/14
LRR Energy LP
Undisclosed
38
OK
Acquired mature oil properties in Lincoln and Creek
counties; includes 2.5 MMboe proved.
Mid
10/1/14
TC PipeLines LP
TransCanada Corp.
215
Canada
Purchased the remaining 30% interest in Bison
Pipeline LLC, which transports Rocky Mountain natural
gas to Midwest markets.
E&P
10/1/14
Whitecap Resources Inc. Undisclosed
238.8
Canada
Acquired interest in a conventional Nisku light sweet oil
pool at Elnora, Alberta.
S&S
10/1/14
WS Atkins Plc
73
USA
Acquired Houston-based company, which designs
offshore deepwater floating production platforms.
Houston Offshore
Engineering LLC
20
www.a-dcenter.com
E&P
10/3/14
EnerVest Ltd.
HighMount Exploration &
Production LLC; Loews
Corp.
805
USA
Bought the Houston-based E&P with operations in the
Permian Basin and Mississippian Lime play.
E&P
10/3/14
EnerVest Ltd.; FourPoint
Energy LLC
Linn Energy LLC; LinnCo
LLC
1950
OK; TX
To purchase properties and related midstream assets
in the Granite Wash and Cleveland plays within the
Western Anadarko Basin. (Expected to close December)
E&P
10/3/14
KKR & Co. LP; Fleur de
Lis Energy LLC
Linn Energy LLC; LinnCo
LLC
350
TX
To acquire oil and gas properties within the Permian Basin
in Ector and Midland counties. (Expected to close 4Q14)
E&P
10/3/14
Pluspetrol Resources
Corp.
Apco Oil and Gas
International Inc.; WPX
Energy Inc.
427
Argentina
To merge Tulsa, OK-based company with assets in
Northwest Argentina.
E&P
10/6/14
Kuwait Petroleum Corp.
Chevron Corp.
1500
Canada
To buy 30% stake in a venture to develop the Duvernay
Shale in Alberta.
E&P
10/6/14
Natural Resource
Partners LP
Undisclosed; KaiserFrancis Oil Co.
340
ND
To purchase nonoperated WI in nearly 200 Bakken/
Three Forks wells in the Williston Basin. (Expected to
close November)
E&P
10/6/14
Undisclosed
Midstates Petroleum
Co. Inc.
90
LA
To acquire ownership interest in 12,816 gross (12,676
net)acres in Beauregard and Calcasieu parishes within
the Dequincy area. (Expected to close November)
INDUSTRY NEWS
Phillips Energy Partners Is Out To Buy, Doesn’t Fret Over Commodity Prices
DALLAS—Phillips Energy Partners wants
to be biggest, not an unusual goal for
most companies.
But the mineral rights firm has shown
over the years a willingness to pull the
trigger on deals, no matter the size of the
transaction. And it has steadily grown in
financial wherewithal.
Phillips buys mineral rights, regardless of whether a property is tied to ongoing production. The company has made
more than 1,200 acquisitions since 2007
and owns rights in 1.5 million gross acres
in 22 states, across unconventional and
conventional basins.
The company’s website offers an automated form and phone number for prospective sellers.
“Our goal is to become the largest and
most sophisticated mineral company out
there,” said Ian Doiron, vice president,
acquisitions, for Phillips at Hart Energy’s
Ian Doiron, vice president, acquisitions, Phillips Energy Partners.
A&D Strategies and Opportunities confer-
backed by private-equity firm EnCap In-
ence in Dallas. Doiron outlined how the
vestments since 2007, when it had four
company goes about making acquisitions.
employees and $35 million in financial
The company’s A&D efforts have been
backing. By 2012, its stake had climbed
21
www.a-dcenter.com
Projects
Current wells +
activity
are likely to overpay. It’s also the point at
20 years ago, when not many people might
which Phillips employs strategic patience.
have sold their minerals or their royalties
Bakken
104
“We’ll just sit back and let these guys get
because of that unknown factor.”
their acreage and overpay—or at least pay
And where are the best deals to be
Eagle Ford
214
a premium—until they get on to the next
made? Phillips, Doiron said, is spending
Niobrara
-
shiny object,” he said.
as much as it wants in the Permian and
Haynesville
349
Permian
1,219
Marcellus/Utica
10
in 500 more that are active, being com-
EOR
1,668
pleted, drilled or fracked.
Other
3,217
Total
6,781
to $100 million.
The company’s first step in evaluating a possible acquisition involves the
“study/dirt-buyers stage, which leads to
the first acquisition of land. Next, the
company obtains and evaluates data before buying mixed and producing rights.
“Our investment strategy, to simplify,
is to acquire minerals and royalties with
associated cash flows that have growth potential or, as we like to call it, the option,”
he said. “For example, we go out and buy
at PV-8 or PV-10 and have that cost-free option: enhanced recovery, additional wells,
additional zones being drilled.”
Acquiring non-producing rights is usually the stage at which the “object is shiny,”
Doiron said, and the time most companies
Phillips said the company has just
Eagle Ford and other good areas. “It de-
under 7,000 producing wells and interest
pends on what you want to pay,” he said.
There’s a lot available in the Utica,
although his company is waiting for the
The company isn’t picky about the
play to be de-risked a bit more, and it may
commodities it buys, Dorion said. It ac-
buy when there is less risk and more dis-
tively hedges to mitigate risks in com-
counted cash flows in the next five years.
modity prices.
“There are deals everywhere,” he said.
Asked about any trends in oil vs.
As for a competitive field that could
gas and whether potential sellers were
grow even larger with the likes of other
choosing to retain oil royalties over gas
oil and gas companies with significant
royalties, Doiron said, “We think buying
mineral rights, Phillips isn’t worried
PDP [proved developed producing] gas is
about competition, Doiron said.
a good thing right now. I guess in a lot of
When the company runs up against
the oil plays, you have so much activity
others on a particular transaction, “we
that the $90-$100 oil doesn’t really scare
have enough deal flow to move on to the
us off. All sellers have a reason to buy
next deal,” he said.
and sell. So, if we buy it at $100 and it
goes down to $60, we’re OK with it.”
“You’re seeing more companies coming into this space, but we pride ourselves
Doiron said the biggest question he’s
on the fact that we’ve been working to get
always asked is, “Do people really sell
to this point for a decade, and we really
their mineral royalties?” Times have
don’t believe that you can become a great
changed, he noted. “I’d say these resource
mineral acquisition company overnight.”
plays have allowed both the seller and the
– Veronica Bucio, Hart Energy
buyer to bracket the value, as opposed to
22
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23
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Contact Information:
DARREN BARBEE Editor
A&D Watch Weekly is published weekly by Hart Energy and is included with a premium subscription to A-
[email protected]
Dcenter.com for $1,297 per year. Individual newsletter subscriptions are $747 per year.
Copyright 2014. All rights reserved. Reproduction of this newsletter, in whole or in part, without prior written
consent of Hart Energy is prohibited. Federal copyright law prohibits unauthorized reproduction by any means
and imposes fines up to $100,000 for violations. Permission to photocopy for internal or personal use is
granted by Hart Energy provided that the appropriate fee is paid directly to Copyright Clearance Center, 222
CONTRIBUTING EDITORS
Velda Addison, Nissa Darbonne, Caroline Evans, Leslie Haines, Susan Klann, Mike Madere,
Richard Mason, Emily Moser, Frank Nieto, Erin Pedigo, Chris Sheehan, Steve Toon,
Scott Weeden, Peggy Williams
EDITORIAL ADVISORS
Thurmon Andress, Breitburn Energy Co. LP; Doug Brooks, Independent; Doug Krenek,
Chalker Energy Partners; Steve Herod, Halcon Resources Corp.; Doug Jacobson, Chesapeake
Energy Corp.; Ann Hallam, PEC Minerals; Alan L. Smith, Quantum Resources LP; Leah D.
Smith, Appaloosa Energy LLC; George Solich, FourPoint Energy LLC; John Walker,
EnerVest Ltd.
Rosewood Drive, Danvers, MA 01923. Phone: 978-750-8400; Fax 978-646-8600; E-mail: [email protected].
ORDER TODAY!
Call: 1-212-608-9078
Fax: 1-212-608-9357
1616 S. Voss, Suite 1000 • Houston TX 77057-2627 • USA
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